The Two-Way

12:36 pm

Tue May 21, 2013

Airbnb Stays Are Illegal In New York, Court Rules

A search for places to stay in New York City via Airbnb returns plenty of results, despite the practice of short-term rentals being found to be illegal under city and state law.

Airbnb

People who use Airbnb, the web company that pairs travelers with residents who rent out their homes on a short-term basis, are breaking New York City's laws, according to an administrative law judge. The vacation rental business was found to run afoul of the city's occupancy code; it also doesn't conform with a state law.

As CNET reports, New Yorkers who break those rules are likely to face legal proceedings only if a complaint is filed against them. Airbnb, based in California, was part of the recent proceedings only as an involved observer.

The ruling issued Monday afternoon is a defeat for Airbnb "host" Nigel Warren, who in February was accused of violating the city's residency code for renting out his East Village apartment for less than a week, as WNYC has reported. Warren now reportedly faces $2,400 in fines.

Questions over Airbnb's legality have risen along with the web service's impact on New York's tourism industry. According to Crain's, some 30,000 New York City residents are Airbnb hosts, accounting for hundreds of thousands of visits each year.

"That kind of demand is expected to generate around $1 billion in local economic activity in 2013," Crain's New York Business reports, "outstripping the impact of the city's booming cruise-ship industry five times over, according to figures cited by tech-industry leaders with knowledge of the site."

Complicating matters further, the economic impact of those visits largely skips the hotels in central Manhattan. A more detailed view of how Airbnb works comes from Chris Dannen of Fast Company, who describes how he made nearly $20,000 in nine months of using the site to rent out space in his apartment in Brooklyn, a popular destination for Airbnb visitors.

For its part, Airbnb has been asking legislators in Albany to modify a state law that bans apartment rentals of fewer than 29 days. The law was approved in 2010 and enacted in 2011.

"It is time to fix this law and protect hosts who occasionally rent out their own homes," Airbnb said in a statementtells CNET. "Eighty-seven percent of Airbnb hosts in New York list just a home they live in — they are average New Yorkers trying to make ends meet, not illegal hotels that should be subject to the 2010 law."